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Trump's 'subtle' Venezuela diplomacy earns praise

In Washington, the Trump administration is adopting a tougher line on Venezuela, but remains wary of leading the charge and fueling the anti-imperialist rhetoric of Venezuela's leftist government.
8 May 2017 – 12:36 PM EDT
Protesters have been on the streets from more than a month, increasingly better prepared with masks and shields. Crédito: Getty Images/Univision

President Donald Trump is taking a close interest in Venezuela, transforming the White House's passive posture into a more active one.

Venezuela has gone from being a "country of interest" for U.S. policymakers to what Trump recently described as "a disaster."

Washington's new approach coincides with the deepening political, economic and institutional crisis in the oil-rich South American nation, which has witnessed a month of street protests that have claimed 37 lives.

In recent weeks the Trump administration has begun to take a diplomatically more active role, although so far it has stayed within the bounds of multilateral efforts led by the Organization of American States (OAS).

"We see a renewed and very positive approach in Venezuela. There is a consensus that the situation is unsustainable," said Brian Dean, a partner with ACG Analytics, a Washington-based company that evaluates scenarios for investors.

The Trump administration's more forceful comments contrast sharply with the benign strategy of Barack Obama - and to a lesser extent his predecessor George W. Bush - as relations gradually deteriorated during the so-called "21st Century" socialist revolution launched by the late President Hugo Chavez between 1999 and his death in 2013.

But skeptics say Trump is a long way from formulating a strategy on Venezuela. "Calling it a 'disaster' does not make a policy nor does it show a seriousness about the problem," said Frank Mora, Obama's former head of Latin American affairs at the Pentagon who is now director of the Latin American and Caribbean Center at Florida International University in Miami.

"For much less repression in Venezuela, the Republicans would blast the Obama administration for 'not doing enough,' while today when the repression is up significantly and opposition protesters are dying everyday, the silence from the previous critics is deafening."

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From Obama to Trump

"Calling it a 'disaster' does not make a policy nor does it show a seriousness about the problem. For much less repression in Venezuela, the Republicans would blast the Obama administration for “not doing enough,” while today when the repression is up significantly and opposition protesters are dying everyday, the silence from the previous critics is deafening."

Obama did use sanctions to highlight corruption in Venezuela, and the U.S. Justice Department has not hesitated to indict individuals close to the government of Chavez's successor, Nicolas Maduro.

In March 2015, the United States declared Venezuela a national security threat due to the impact on the American financial system of corruption there. Venezuela provides just under 10 percent of U.S. petroleum imports.

Trump has followed suit. Three weeks after his inauguration, the U.S. Treasury Department announced sanctions against Venezuelan Vice President Tarek El Aissami, accusing him of links to drug trafficking and money laundering and alleged assets in the hundreds of millions of dollars.

However, after Obama launched a diplomatic rapprochement with Cuba in late 2014, Venezuela was forced to take a back seat. Havana is Venezuela's closest ally, and analysts say Obama administration officials were concerned that a major clash between Washington and Caracas could negatively impact the historic thaw with Havana, a cherished "legacy" issue for Obama.

The new Republican administration has no such concerns. During his campaign, Trump criticized Obama's cozying up to the communist-run island and promised Cuban exiles in Florida that he would reverse it.

There remains broad consensus that a more vocal U.S. policy could be counterproductive, reviving what Chavez liked to call the "evil empire," a term that, fairly or not, earned the admiration and support of people inside and outside Venezuela.

However, since taking office, Trump has raised Venezuela in phone calls and meetings with world leaders, analysts say, including Peru's Pedro Pablo Kuczynski in February and Argentina's Mauricio Macri late last month.

"I don't see anything new. Trump is using the same playbook as Obama," said Michael Shifter, president of the Inter-American Dialogue, an influential think tank in Washington D.C., who pointed out that Obama frequently raised Venezuela with other heads of state.

Shifter said it was hard to make comparisons between Obama and Trump on Venezuela. "It's a matter of timing. The circumstances have changed," he said, noting the sudden upsurge in opposition protests over the last month.

Putting a team together

To be sure, Washington's decision to opt for multilateralism is only partly due to leftwing rhetoric. After four months, Trump still does not have his full team in place.

"The Western Hemisphere section of the State Department is very weak. They don't have enough expertise on Venezuela," said Eric Langer of the Department of Latin American Studies at Georgetown University in Washington.

With a proposed one-third reduction of the State Department budget, several positions remain unfilled and others are occupied by acting officials held over from the Obama administration, such as Michael Fitzpatrick, the current undersecretary for the Western Hemisphere.

Fitzpatrick has raised his profile in the last couple of weeks with appearances on Univision and CNN. "The situation is clearly different now," he confirmed in an interview with Univision's Enrique Acevedo. "It is a time of crisis, there is great concern in the region," he added.

Last week, Fitzpatrick told a call with reporters that the United States would continue to work with the OAS on Venezuela, despite the announcement by Caracas it was quitting the group. Fitzpatrick also hinted more Treasury sanctions in the future.

The role of Congress

Congress is also stirring into action. On Thursday, a group of 15 members of Congress from both parties wrote a letter to the White House advocating a "dual approach" to deal with Caracas by intensified diplomacy as well as tightening the screws on Maduro with sanctions.

They also asked the White House to seek United Nations help in creating a channel for "humanitarian relief" to help out independent organizations currently subject to strict import controls. On Saturday, Trump's ambassador to the United Nations, Nikki Haley, issued a statement saying she was deeply concerned about the "violent crackdown on protestors" in Venezuela, and accused the government of "failing to provide basic food and medical needs to the Venezuelan people."

The Trump adminstration and members of Congress have recently echoed opposition demands for new elections in Venezuela, as well as respect for democracy and the separation of power and the release of political prisoners.

Change of perception

Another shift involves Washington's perception of the Venezuela's political opposition, previously a source of great frustration due to divisions and mistrust between their leaders, as well as a concern over their perceived lack of popular support in Venezuela.

In recent weeks several opposition leaders, including National Assembly President Julio Borges and former presidential candidate Henrique Capriles, have traveled to Washington to seek support.

"We do see a different attitude, which is encouraging because we realize that the Trump administration has important issues such as Syria and Iraq to deal with," said Carlos Vecchio, an opposition leader exiled in the United States who has met with U.S. officials.

Vecchio said the office of Vice President Mike Pence is well informed on Venezuela and appears to be taking the lead on behalf of Trump.

In February, Trump received Lilian Tintori, wife of the imprisoned opposition leader Leopoldo López, at the White House, accompanied by Florida Senator Marco Rubio.

“Lilian Tintori was a shiny object and [Trump] saw that. He was very moved by the event in the process of enacting a new policy,” said Dean at AGC Analytics.

"The United States policy has been surprisingly positive. I don't think we expected as subtle a policy as we have seen from the Trump administration," said Phil Gunson, Andean regional analyst for the International Crisis Group, who has been based in Caracas since 1999.

"The U.S. has a role to play in contributing to the international pressure, but that is best done multilaterally, which is what we have seen so far," Gunson added. Unilateral measures would only "play into the hands of the [Maduro] government" by fueling its accusations of an "imperialist plot" to defeat socialism, he said.

Venezuela's problem is not elections, Maduro said in a recent speech. "Venezuela's problem is that an empire in extremists' hands wants to take our oil and carry out a coup," he said.

Debt and the Russians

One possible concern if Venezuela collapses completely is the domestic fallout in the United States.

Besides Venezuela's petroleum supplies, its state oil company Petróleos de Venezuela (PDVSA) owns Citgo, the Texas-based company with gas stations in 30 U.S. states, as well as three refineries. Due to Venezuela's mounting debt, Citgo was put up as collateral for a loan with Russia's state-owned oil company Rosneft in December.

If the Venezuelan oil company is unable to meet its debt service payments, those refineries and service station contracts would pass into the hands of Russia, a potentially awkward situation for the U.S. energy sector.

Venezuelan debt is uppermost in the minds of many, not just in Washington and Moscow, but also among hedge funds in New York and around the world.

The country is due to pay its latest installment of debt servicing, calculated at $2.2 billion, this fall. Experts say the Central Bank does not have the cash on hand to make the payment and would have to dip into an estimated $7 billion of gold in its reserves.

Should Venezuela default on its debt there could be actions around the world to seize Venezuelan oil in tankers.

“There's no question the noose is around the Maduro government’s neck," said Dean.

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